TPP to boost Vietnamese economy, say experts

19 Jan '16

3 min read

As Vietnam prepares to sign the 12-nation Trans-Pacific Partnership (TPP) agreement, economists in the Southeast Asian country have said that signing free trade agreements with big partners including the US, Japan, the European Union would help Vietnam to expand its trade relations across the globe, boost exports and enhance its participation regional value chains and service development.

Addressing a seminar on Vietnam's Socio economy in 2015 and Opportunity – Challenges in Hanoi recently, Nguyen Quynh Nga, Deputy Head of the Multilateral Trade Policy Department under the Ministry of Industry and Trade said, the Trans-Pacific Partnership (TPP) was expected to be signed on February 4, 2016, in New Zealand, and Vietnamese agencies concerned were preparing a document for the occasion, the Voice of Vietnam has reported.

Although Vietnam has renewed its economic mechanism, boosted renovation and improved the business climate with a view to attracting more foreign investors, Nga said challenges such as huge import bills and competition from foreign service and goods, and poor high-tech quality remained.

All sectors such as textiles, fisheries, infrastructure, and logistics, apart from real estate, steel and timber products, and drugs would benefit from the TPP, noted.

Can Van Luc, Director of BIDV Training School at the Bank for Investment and Development of Vietnam (BIDV) said adding that Vietnam would enjoy many benefits from the TPP once it comes into effect after two years. He said Vietnam and neighbouring Cambodia stood to gain as the largest beneficiaries after the establishment of ASEAN Economic Community (AEC) in 2015. Vietnam's GDP could grow a further 3.5 per cent thanks to the AEC while the World Bank has forecast 10 per cent economic growth after it joins the TPP.

Projecting a brighter economic outlook for 2016, Trung Thanh, Associate Professor of the National Economic University said Vietnam's economy will continue to recover as the world economy bounces back stronger than before in which foreign direct investment (FDI) plays an important role.

With the world economic growth showing signs of improvement, especially in the US, Vietnam will be able participate better in the global value chain and receive numerous opportunities from the free trade agreements to increase exports and attract more investment capital, Thanh said.

He, however, pointed out that, Vietnam lacked a long-term motivation for growth, and it needed to renew its growth model and restructure the economy by focussing on important industries. (SH)

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